073-NLR-NLR-V-38-FERNANDO-v.-KURERA-et-al.pdf
Fernando t>. Kurera.
337
Present: Moseley J. and Fernando A>J.
FERNANDO v. KURERA et al.
73—D. C. Chilaw, 8,683.
Decree—Action on summary procedure—Judgment entered by default—Agree-ment entered into before judgment—Application to certify payment—Scope of section 344 of Civil Procedure Code.
Where, in an action on a promissory note by way of summary procedureafter judgment had been entered against one of the defendants bydefault, it was agreed between the plaintiff and that defendant that onthe payment of a certain sum of money and interest the plaintiff shoulddischarge him from further liability on the note and levy the balancedue from the other defendants,—
Held, that it was competent to the Court under section 344 of theCivil Procedure Code to inquire whether any payment was made inpursuance of such an agreement and to stay execution against thedefendant.
Kuppe Kanny v. Caliappa Pillai (19 N. L. R. 353) followed.
T
HIS was an action by way of summary procedure brought by theplaintiff to recover a sum of money due on a promissory note from
the defendants of whom the respondent was the sixth. Althoughsummons was served on November 3, 1928, on the respondent, he did notapply for leave to appear and defend. However, the action could notproceed as some of the other defendants had died. On September 26,1935, the respondent moved that a sum of Rs. 1,140 paid by him to theplaintiff be certified of record.
The Court held that although no formal decree had been entered againstthe respondent, the case had been concluded as between him and theplaintiff and directed that decree be entered against the respondent withliberty to him to move under section 349 of the Civil Procedure Code tohave the payment certified. Wljen the application to certify paymentwas made the plaintiff-appellant contended that the section applied toan adjustment made before decree. It was argued for the respondentthat he was entitled to make his application under section 344 of theCivil Procedure Code.
The learned District Judge upheld the respondent’s contention and fixedthe matter for inquiry. The plaintiff appealed.
J. R. Jayawardene, for plaintiff, appellant.—This appeal involves aconsideration of sections 344 and 349 of the Civil Procedure Code.
Section 349 would not apply as the alleged payments were made beforedecree had been entered. See Kup pe Kanny v. Caliappa Pillai Section344 cannot be availed of by the defendant, as that section onlycontemplates questions relating to the execution of the decree. TheCourt has no authority to inquire into payments made before the passingof the decree under that section. It was possible for the defendant eitherto contest the action, prove the payments and ask the Court for a judg-ment and decree in his favour ; or if the other party agreed, to apply undersection 408 of the Civil Procedure Code for a decree in terms of a mutual
> 19 N. L. R. 253.
338
Fernando v. Kurera.
adjustment. He failed in an application under section 408 but did 0otcontest the action, though he had an opportunity of doing so. Hisapplication now is an attempt to attack a valid decree obtained by us,on the ground of an adjustment prior to the decree. His application ispremature. The action has not reached the stage of execution. Plaintiffhas a decree in his favour, but he has not sought to execute it. Section 344refers to “ questions relating to the execution of the decree ”. When theplaintiff seeks to execute his decree—he may never do so—it will betime then for an application under section 344.
In any case section 344 would not help the defendant. The learnedJudge relied on the case of Kuppe Kamny v. Caliappa Pillai (.supra).This case was considered in the later case of Velu Pillai v. Sundaram-pandianpulle *. De Sampayo J. after considering Indian authorities saysthat the previous case is not a sufficient authority for the propositionthat an agreement entered into before the decree, and not embodied inthe decree, can be given effect to on an application under section 344.He says that the later Indian decisions—vide Benode Lai Pakrashi v.Brajendra Kumar Saha * and Hassan Ali v. Gauzi Ali Mir3—express asounder view as regards the scope of the section in question, than the caseof Laldas Narandas v. Kishordas Devidas *, which was followed by him inKuppe Kanny v. Caliappa Pillai (supra). Section 344 does not refer toagreements which seek to attack the decree itself. The Court, once thedecree is passed, is functus, see Pauluz v. Perera‘. Arrangements madein a pre-decretal era can be proved under section 408 and the party cancontest the case and ask for judgment in terms of facts proved. LaterIndian cases support my contention, see Butchiar Chetty v. Tayar RaoNaidu’ and Chittambaram v. Krishna Vaithiar
H. V. Pcrera, for sixth defendant, respondent.—The defendant did notfile answer nor contest the case, therefore the plaintiff became entitledto judgment. In an action by way of summary procedure under section704, the plaintiff became entitled to a decree when the defendant did notappear ov defend the action and did not obtain leave to defend the action.There was no contentious matter after that. My submission is that thealleged agreement was carried out and monies paid by us after the plaintiffbecame entitled to a decree. The learned Judge himself says thatalthough no formal judgment had been entered against him, the case waspractically concluded between the plaintiff and the sixth defendant,before the alleged payments were made. Therefore it is possible for theCourt to give the defendant relief under section 349, and certify paymentof sums paid after the plaintiff became entitled to judgment. Thoughthe section refers to “ money payable under a decree ” it would applyeven when the plaintiff is entitled to judgment and there is only a formalact to perform. In any case section 344 would apply as the adjustmentsdo not seek to attack the decree but seeks to limit the execution of thedecree to a certain sum as between these two parties only.
' 21 N. L. B. 236.4 {1896) I. L. B. 22 Bom. 463.
s (1902) I. L. B. 29 Cal. 810.8 34 N. L. B. 437.
8 (1903) I. L. B. 31 Cal. 179.8 54 Madras 184.
’ 40 Madras 233.
FERNANDO AJ.—Fernando v. Kurera.
339
* J. R. Jayawardene, in reply.—Under section 704 the plaintiff cannotdemand but has a right to move for judgment against a defaultingdefendant. The plaintiff is not by right entitled to demand entry ofjudgment in his favour (Ulaganathan Chetty v. Vavana et al.*). It will bean abuse of language to say that section 349 when it refers to “moneypayable under a decree” also means “money payable under a judgmentwhich may be entered if the plaintiff applies for it, which he cannotdemand from Court The defendant cannot come in both undersection 349 and section 344. The existence of section 349 shows thatsection 344 does not apply to monies paid in satisfaction of a decree.Money paid before decree must be proved and the decree enteredaccordingly.
Cur. adv. vult.
December 11, 1936. Fernando A.J.—
The plaintiff-appellant filed this action on October 16, 192S, underchapter 53 of the Civil Procedure Code against six defendants of whomthe respondent was the sixth. Summons was served on the respondent,on November 3, 1928, but he did not take steps to obtain leave to appearand defend, and filed no answer. Section 704 of the Civil Procedure Codewould then apply, and the plaintiff would be entitled to judgment againsthim at the end of the period spcified in the summons.
Some of the other defendants died soon afterwards, and the plaintiffcould not for some time proceed with the action. On March 6, 1935,plaintiff moved to revoke the proxy already given by him, and thereafterappointed another Proctor and took steps to continue the action. OnJune 18, 1935, the sixth defendant moved that the action be ordered toabate, but that application was refused, and he then applied on September26, 1935, that a sum of Rs. 1,140 paid by him be certified of record. Onthat application, the learned District Judge ordered the matter to bementioned on October, which was the date fixed for the trial as betweenthe plaintiff and the other defendants.
The learned District Judge considered the application of the sixthdefendant as falling under section 408 of the Civil Procedure Code, butit was argued for the plaintiff that the respondent could not proceed underthat section, inasmuch as, although a formal decree had not been entered,the case as against the sixth defendant had been concluded when the sixthdefendant failed to file answer, and it was further pointed out that onNovember 19, 1828, the sixth defendant had admitted the endorsementof the promissory note sued upon, and had admitted receipt of theconsideration on the note The learned District Judge held that althoughno formal judgment had been entered against him, the case was practicallyconcluded between the plaintiff and the sixth defendant. He also heldon the authority of Ramiya v. Meera Lebbe *, that the Court could onlyact upon a settlement which is stated to Court by both parties. Forthese reasons, he ordered decree to be entered against the sixth defend-ant with liberty to him to take the necessary steps under section 349 ofthe Civil Procedure Code to have any payment made by him certifiedof record.
1 3 N.L. B. 52.
» 26 N. L. R. 126.
340
FERNANDO A.J.—Fernando v. Kurera.
This order was made on October 14, 1935, and on the following day,Proctors for the sixth defendant filed petition and affidavit and moved fora notice on the plaintiff to show cause why satisfaction of the decreeshould not be entered. This application was clearly made in accordancewith section 349 of the Civil Procedure Code. The inquiry into thisapplication came up on March 9, 1936, before another Judge of theDistrict Court. It was then contended for the appellant that the paymentreferred to by the sixth defendant was made not after decree had beenentered, but before, and the District Judge held that section 349empowered the Court to take cognizance of a payment or adjustment ofthe decree only if such payment or adjustment is made after the decreehas been entered, and he relied on the case of Kuppe Kanny v. CaliappaPillai. It appears to have been argued on this behalf that althoughsection 349 did not apply, the sixth defendant was entitled to move undersection 344 of the Civil Procedure Code, and the learned District Judge onthe authority of Kuppe Kanny v. Caliappa fixed the matter for inquiry onthe facts. The plaintiff appeals against this order, and the main con-tention put forward on his behalf at the appeal was that section 344only contemplated questions relating to the execution of the decree, andthat the Court had no power to inquire into payments or adjustmentsmade before the passing of the decree.
Now in Kuppe Kanny v. Caliappa, this Court held that a Court whenasked to execute a decree may properly have regard to any agreementbetween the parties touching the satisfaction of the decree to be entered,and that the Court had the right to refuse execution if the terms of theagreement so required. De Sampayo J. in his judgment referred to theIndian case of Laldas Narandas v. Kishordas Devidas2, where the questioncame up before a Bench of four Judges. In that case, the appellantLaldas pleaded that there was an agreement entered into between himselfand the respondents to the effect that they would not hold him responsiblefor costs of the decree about to be entered, but that they would recoverthe same from Shankar Lai who was also a defendant in the action. Thequestion that came before the Court was whether the existence andvalidity of the agreement relied on by Laldas ought to be determined inexecution proceedings under section 244 of the Indian Civil ProcedureCode (which is practically in the same terms as section 344 of our Code),or in a separate suit. The finding of the Court was that as the agreementrelied on by the appellant was pleaded by him in order to stay executionof the decree in regard to costs as against him, the inquiry fell within theterms of section 244 and Ranade J. said that the appellant had a right torequire the executing Court tc investigate the matter and that there wasnothing like going behind the decree in such an inquiry. All the Judgesagreed, that the existence and the validity of such an agreement ought tobe determined in execution and not by separate suit.
The question dealt with in the judgment in Kuppe Kanny v. CaliappaPillai (supra) appears to have come up again before this Court in VeluPillai v. Sundarampandianpulle * before Ennis A.C.J. and De Sampayo J. 1
1 19 N. L. R. 253.• (1896) I. L. R. 22 Bom. 463.
■ 21 N. L. R. 236.
FERNANDO AJ.—Fernando v. Kurera.
341
and there it was held that Kuppe Kanny v. Caliappa Pillai was not a suffi-cient authority for the proposition that an agreement entered into beforethe decree, and not embodied in the decree, can be given effect to onan application under section 344. Ennis A.C.J. appears to have come tothat conclusion because he thought that the existence of a decree was apreliminary to any proceeding under section 344, and that no agreementprior to the decree which is inconsistent with it can be given effect to onan application in execution. He differentiates between Benode Lai v.Brajendra *, and the case of Laldas Narandas v. Kishordas Devidas (supra)by saying that the latter case referred to an agreement as to costs whichwould affect the manner of the execution of the decree, and which wasnot inconsistent with the decree. De Sampayo J. referring to the samecase of Benode Lai v. Brajendra and the case of Hassan Ali v. Gwuzi Ali1,thought that these later Indian decisions expressed a sounder view asregards the scope of section 244 of the Indian Civil Procedure Code.With the greatest respect, I would venture to state that I cannot see anydifference between an agreement which affects the question of costsembodied in a decree and an agreement which affects some other portionof the decree. It seems to me that an order as to costs if embodied in thedecree is a portion of that decree just as much as any other orderembodied in it, and I can see no difference in principle between an appli-cation to certify payment as to costs ordered by the decree and anapplication to enter satisfaction of any other portion of the decree, wherethe application in either case is based on an arrangement entered intobefore the decree is entered. The judgment of De Sampayo J. however,raises the question whether the previous case of Kuppe Kanny v. CaliappaPillai (supra) had been properly decided, and on this question theIndian authorities must be examined with greater detail.
The earliest Indian decision to which reference is necessary is the caseof Prosums Kumar v. Kalidas where their Lordships of the PrivyCouncil stated that they were glad to find that the Courts in India hadnot placed any narrow construction on the language of section 244, andI think this observation should be borne in mind in any attempt toconstrue the provisions of the section. I have already referred to the FullBench decision in Laldas Narandas v. Kishordas Devidas (supra). In thecase of Benode Lai v. Brajendra (supra) the judgment-debtor pleaded that,before the decree in question was passed, it had been agreed between theparties that the decree-holder would not enforce one of the instalmentsprovided in the decree in the event of the judgment-debtor paying up thefirst nine instalments in due time. He also pleaded that three years beforethe entering of the decree he had paid a sum of Rs. 2,500 to the decree-holder on account of the claim, and that therefore the decree-holder was notentitled to execute the decree for the full amount of the last instalment.The Court held that if the agreement was given effect to, it would havethe effect of nullifying the decree, and differentiated that case from thecase of Laldas Narandas v. Kishordas Devidas (supra), on the ground that thequestion raised in that case was whether the existence and validity of the
» 29 Calcutta 810.* (1903) I. L. R. 31 Cal. 179.
* 19 Calcutta 684.
342
FERNANDO A.J.—Fernando v. Kurera.
agreement ought to be determined under section 244 or in a separate suit,and not whether an agreement entered into before the decree was madecould be given effect to. The other case cited to De Sampayo J. was thecase of Hassan Ali v. Garni Ali (supra), and the Court there held that casescan only be inquired into under section 244 when the existence of a decreewhich is susceptible and capable of execution is conceded, and the sectiondid not apply to a case when the object was to impugn the decree itself,and the learned Judges thought that the case of Laldas Narandas v.Kishordas Devidas did not apply to such a case. We have been referredby Counsel, who argued the question before us very fully, to the cases ofChittambaram v. Krishna Vaithiar1, and Butchiar Chetty v. Tayar RaoNaidu3 the former being a decision of the full Bench of the MadrasHigh Court.. Referring to section 47 of the new code of the Civil Procedurein India, Abdul Rahim C.J. remarked that the language of section 244 wasperhaps not so comprehensive as that of section 47, and he preferred tofollow the long course of decisions in Madras where it had been held thatan agreement made before the passing of a decree was a matter to beinquired into and decided by the executing Court. Seshagiri Ayyar J.referred to the fact that for over 20 years the Madras Court had adoptedthe principle that agreements like the one in question could be pleadedin execution proceedings, and referred to the case of Laldas Narandas v.Kishordas Devidas (supra) as adopting the same principle, and he alsoreferred to certain judgments of the High Court of Allahabad. Philips J.differed from the rest of the Court, but the judgment of the Full Benchmust be taken to be the judgment of the majority.
The position was considered again in the later case of Butchiar Chettyv. Tayar Rao Naidu (supra), where all the authorities were considered.Pakenham Walsh J. in that case stated that the agreement in the caseof Laldas Narandas v. Kishordas Devidas (supra), was an agreement thatas between the two defendants costs could be recovered from one of them,and remarked that the matter in question there may be held to be oneof execution though in fact the result might be to alter the decree withregards to costs recoverable from the defendants. He refers to the case ofVelu Thevan v. Krishnasamy ”, where it was held that an agreementprior to the decree not to execute the decree that might be passed againstone judgment-debtor, and to realize the whole amount from the othercould be pleaded in execution, and he observes that the matter does arise inexecution although the effect of the arrangement may be to alter thedecree. He next cited Arumugam v. Krishnasamy *, where the arrange-ment was that the decree which might be passed should be inexecutablein part, and where it was held that such an arrangement could not beenforced in execution, and cited a passage from the judgment of SeshagiriAyyar J. where he says, “ that an attack against the decree as having beenobtained by fraud by one of the parties is not within the principle ofChittambaram v. Krishnasamy Vaithiar ” (supra). He then proceeds todiscuss the cases in which it had been held that an agreement which directlystrikes at the decree itself cannot be pleaded in execution, and cites
» 40 Madras 233.s 54 Madras 184.
48 Madras Law Journal 277.
43 Madras 725.
FERNANDO A.J.—Fernando v. Kurera.
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the judgment in Mulla Ramazan v. Maung Poking where the judgment-debtor pleaded that in consideration of his confessing judgment for thefull amount of Rs. 2,000 the decree-holder agreed to accept Rs 1,000only, and the argument was that the decree could be executed to theextent of Rs. 1,000 only.
After considering all the authorities, Pakeham Walsh J. was of opinionthat the Full Bench case of Chittambaram v. Krishnasamy Vaithiar (supra)only covered agreements which relate to execution, and not to agreementsattacking the decree itself. For that reason he came to the conclusionthat the judgment-debtor in Butchir Chetty v. Tayar Rao Naidu (supra)was not entitled to credit in certain sums which he had paid before theexecution of the decree.
I would venture with all respect to agree with the reasoning in thiscase and to hold that under our law it is open to a party under section 344to prove an agreement entered into between the parties previous to thedecree relating to the execution of the decree, whereas it is not open tohim to prove any agreement the effect of which would be to attack thedecree itself, and it follows that the case of Kuppe Kanny v. Caliappa Pillai(supra) had been rightly decided. The facts in the Full Bench case of LaldasNarandas v. Kishordas Devidas (supra) relied on by De Sampayo J. appearto me to be exactly parallel to the facts of the present case, and the affidavitof the sixth defendant dated September 24, 1935, sets out the agreement inthese words, “ it was agreed between me and the plaintiff that on paymentof Rs. 1,000 and interest up to the date of payment, the plaintiffs shoulddischarge me from any liability on this note, and proceed to levy anybalance of the amount from the other defendants. ” This agreement doesnot seek to attack the decree itself, but only limits the execution of thatdecree to a certain sum as between the plaintiff and the sixth defendant,and does not interfere with the execution of the decree as against theother defendants. I come to the conclusion, therefore, that under section344 of our Civil Procedure Code, it is open to the sixth defendant-respondent to plead such an agreement, and to ask the Court to inquireinto the question whether there was such an agreement between theparties, whether any payments were made in pursuance of such an agree-ment, and to stay execution as against the respondent if the facts arefound in his favour.
The order made by the learned District Judge fixing the matter forinquiry was therefore right, and the appeal of the plaintiff must bedismissed with costs.
Moseley J.—-I agree.
Appeal dismissed. 1
1 4 Rangoon 118.